Zero VAT on basic daily goods goes into effect

A Council of Ministers decision for a zero VAT rate on a range of basic daily goods such as bread, milk, eggs, children's food, diapers, feminine hygiene products, and adult diapers comes into effect on Friday.

Government Spokesman, Konstantinos Letympiotis, has said that the decision was taken to tackle the issue of high prices, particularly as the island is facing a period of high inflation, and “is a top priority for the government. This is also another measure included in a package of measures aimed at a holistic approach to addressing high prices and relieving Cypriot households”, he added.

Detailed clarifications regarding the basic goods that fall under the zero VAT rate were issued on Wednesday by the Tax Department.

It said that the term "bread" includes all types of bread, fresh or frozen, with or without yeast. However, baked goods, dried bread, and any bread with added ingredients such as raisins, nuts, or spices are not included.

Fresh milk (cow's milk, goat's milk, sheep's milk), sugar-containing milk (condensed milk, long-life milk), flavored milk (chocolate, banana), and plant-based milk (almond, soy, rice) will also have a zero VAT rate.

The decision of the Council of Ministers also includes eggs as basic goods with a zero VAT rate, as well as infant foods, clarifying that those in powder, dry, or liquid form intended for consumption by children are included. Snacks (chips, nuts, sweets, chocolates, ice cream) are not included.

In addition, children's diapers and adult diapers are included, as well as products for feminine hygiene protection, such as tampons, sanitary pads, and incontinence pads.

The measure will be in effect from the date of publication of the Decree in the Official Gazette of the Republic until October 31, 2023.